think he explained it very well. over time -- over the time he was given, he explained it very well. >> think you very much, liz. the candidates themselves are back on the campaign trail tomorrow. we will tell you where the very events are and what we will cover. the president will stay in denver and he has a campaign rally at 12:05 p.m. eastern. mitt romney is coming back to the east coast. he will be in fishes a bill, virginia. it will be at 6:45 p.m. eastern time. we will continue the conversation with all of you on line. there's a lot of commentary. you can discuss with others what you saw tonight and you can discuss on twitter using the hashtag #cspan2012.

we will replay the debate in its entirety. we will have another ladot. iphones 90 minutes from now. you have another opportunity to talk to the national audience. now, the debate in its entirety. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> let's have a terrific evening. >> viewed evening from the magnus arena. i am jim lehrer from the pbs newshour and i welcome you to the first of the 2012 presidential debates between

president barack obama, the democratic nominee and former massachusetts gov. mitt romney, the republican nominee. this debate is sponsored by the commission on presidential debates. tonight's 90 minutes will be about domestic issues and it will follow a format designed by the commission. there will be six roughly 15- minute segments with the first question and then open discussion for the remainder of each segment. thousands of people offered suggestions on segment semtex or questions via the internet and other means. but i made the final selections. for the record, they were not submitted for approval to the commission for the candidates. the segments, as i announced in advance will be three on the economy and one each on health

care, the role of government and the governing with an emphasis throughout on differences, specifics, and choices. both candidates also have to- minute closing statements. there is a noise exception right now as we welcome president obama and governor romney. [applause] revi

>> welcome to you both. let's start with the economy, a segment one. let's start with jobs. what are the major differences between the two of you about how you would go about creating new jobs? you have two minutes to start. mr. president, you will go first. >> i want to thank the university of denver for your hospitality. 20 years ago, i became the luckiest man on earth because michelle obama agreed to marry me. so i just want to wish, sweetie, you have the anniversary and let you know that a year from now we will not be celebrating it in front of 40 million people. [laughter] four years ago, we went through

the worst financial crisis since the great depression. millions of jobs were lost. the auto industry was on the brink of collapse. the financial system had frozen up. because of the resilience and determination of the american people, we began to fight our way back. over the last 30 months, we have seen 5 million jobs in the budget we have seen 5 million jobs created. we know we have a lot of work to do. the question is not where we have been, but where we are going. governor romney has a perspective that says, if we cut taxes, skewed towards the wealthy and roll back regulations, we will be better off. i have a better view. we have to invest in education and training. it is important to develop new sources of energy here in

america. it will be up to the voters what path we should take. will we double down on the top- down economic policies that helped get us into this mess or embrace a new economic patriotism that says america does best when the middle class does best? i look forward to having that debate. >> it is in honor to be here with you. i appreciate the chance to be with the president. congratulations to you, mr. president, on your anniversary. i am sure this is the most romantic place you could imagine, here with me. congratulations. this is a tender topic. i have met people across the

country. i was in dayton, ohio, and a woman said, "i have been out of work since may. can you help me?" yesterday was a rally in denver. a woman with a baby said, "my husband has had four jobs in three years -- part-time jobs. he lost his recent job." we lost our home. can you help us?" yes, we can. it will take a different path, not the one we have been on. not the one the president describes as a top-down tax cut for the rich. my plan has five parts -- get us not american energy independent to create 4 million jobs. open up trade in latin america. crackdown on china if they cheat. make sure people have the skills to succeed in the best schools in the world.

get us to a balanced budget, champion small business. it is small business that creates jobs in america. over the last four years, small-business people decided america may not be the place to open a new business because new business start-ups are down to a 30-year low. i know what it takes to hire people. i am concerned that the path we are on is unsuccessful. the president has a view very similar to what he had four years ago that a bigger government spending more, taxing more. trickle-down government would work. that is not the right answer for america. i will restore the vitality that gets america working again. >> please respond directly to the trickle-down approach. >> let me talk about what i think we need to do. we have to improve our education system.

we have made enormous progress drawing on ideas from democrats and republicans. they are starting to show gains in some of the toughest-to-deal- with schools. we have a program called race to the top that has prompted reforms in 46 states, raising standards, improving how we train teachers. i want to hire another 100,000 new math and science teachers and create 2 million more slots in our community colleges so people can get trained for the jobs that are out there. i want to make sure we keep tuition low for our young people. when it comes to our tax code, we agree that our corporate tax rate is too high. i want to lower its for manufacturing. i want to close loopholes that are giving incentives for companies shipping jobs overseas. i want to give tax breaks for

companies investing in the united states on energy. we agree we have to boost american energy production, and oil and natural gas production have been higher than they have been in years. we have to look at the energy source of the future like wind, solar, and biofuels and make those investments. all of this is possible. we have to close our deficit. we will discuss how we deal with our tax code and how we make sure we are reducing spending in a response away and have enough revenue to make those investments. governor romney's central economic plan calls for a $5 trillion tax cut on top of the extension of the bush tax cut. $2 trillion in additional military spending --

how we pay for that, reduce the deficit and making the investments we need without dumping the cost on the middle- class americans. that is one of the central questions of this campaign. >> you have spoken about a lot of different things. governor romney, do you have a question you would like to ask directly about something he just said? >> i do not have a tax-cut scale you're talking about. we have to provide tax relief to people in the middle class. i will not reduce the share of taxes paid by high income people. they are doing fine in the economy. the people who are having a hard time are middle-income americans. under the president's policies, they have been buried. middle income americans have seen their income decreased by $4,300. this is a tax in itself -- the economy tax.

gasoline prices have doubled under the president, electric rates are up, food prices are up, health-care costs have gone up by $2,500 per family. the question is how to get them going again. it is energy and trade. the right kind of training programs. the president mentioned those ideas. education. it is key. it is the future of our economy. we have 47 training programs. they are reporting to eight agencies. we have to get those dollars back to the states and to the workers so they can create pathways into training they need for jobs that will help them. taxation. we should bring the tax rates down. for corporations and individuals. for us not to lose revenue, i lowered deductions and credits

and intentions so we keep taking in the same money when you account for growth. energy is critical. the president pointed out that production of oil and gas in the u.s. is up but not due to his policies -- in spite of his policies. all of the increase in natural gas and oil has happened on private land, not on government land. your administration has cut the number of permits and licenses in half. if i am president, i will double them. i will get the oil from offshore and alaska. i like coal. people in the coal industry feel like it is getting crushed by your policies. i want to get america and north american energy independence so we can create jobs. i am not looking to cut massive taxes and reduce the revenues going into the government.

my number one principle is that there will be no tax cut that adds to the deficit. no tax cut that adds to the deficit. i want to reduce the burden being paid by middle-income americans. i cannot reduce the burden paid by high-income americans. any language of the contrary is not accurate. >> let's talk about taxes. it is instructive. four years ago when i stood on the stage, i said that i would cut taxes for middle-class families. that is what i did. we cut taxes for middle-class families by about $3,600. we do best when the middle class is doing well. by giving them those tax cuts, they have a little more money in their pockets so they can buy a new car. they are in a better position

to weather the recession we went through. they can buy a computer for their kid who goes to college, which means they spend more money. businesses make more profits and hire more. governor romney's proposal that he has promoted for 18 months calls for a $5 trillion cut. -- $5 trillion tax cut. he is saying he will pay for it by closing loopholes and deductions. he has been asked how he would close those loopholes and deductions. he has not been able to identify them. when you add up all the loopholes and deductions that upper-income individuals are taking advantage of, take those all away. you do not come close to paying for $5 trillion. and $2 trillion in additional

military spending. that is why independent studies looking at this said the only way to meet governor romney's pledge of not reducing the deficit or not adding to the deficit is by burdening middle- class families. they would pay about $2,000 more. that is not my analysis. that is the analysis of the economists. that kind of top down economics where people at the top are doing well while middle-class families are burdened further, that is not what i believe is a recipe for economic growth. >> what is the difference? let's stay on taxes for a moment. >> everything he said about my tax plan is inaccurate. if the tax plan he described were a tax plan i were going to support, i would say no. i will not put in place a tax cut that adds to the deficit. that is part one.

no economist can say mitt romney's tax plan adds $5 trillion. i will not reduce the share paid by high-income individuals. you keep saying that. it is not the case. i have five boys. i am used to people saying something that is not always true, repeating it, and hoping i will believe it. that is not the case. i will not reduce the taxes paid by high-income americans. i will not raise taxes on middle-income families. i will lower taxes for middle- income families. there are studies that looked at the studies you describe and say it is wrong. a study said you will raise taxes by $3,000 or $4,000. i want to bring down rates, lower deductions and

exemptions, and so forth so we keep getting the revenue we need. small-business pays that individual rate. 54% of america's workers work in businesses that are taxed at the individual tax rate. if we lower that rate, they will be able to hire more people. this is about jobs. >> do you challenge what the governor said about his plan? >> for 18 months he has been running on this tax plan. now, he is saying that his idea is never mind. if you are lowering the rates the way you described, it is not possible to come up with enough deductions that only affect high-income individuals

to avoid raising the deficit or burdening the middle class. it is math. it is arithmetic. governor romney and i do share a deep interest in encouraging small-business growth. while my tax plan has been lowering taxes for 98% of families, i lowered taxes for small businesses 18 times. i want to continue the tax rates we put into place for small businesses and families. for incomes over $250,000 per year, we should go back to the rate we had when bill clinton was president when we created 23 million new jobs. we created a lot of millionaires. by doing that we can not only reduce the deficit, we can not only encourage job growth

through small businesses, but we can make the necessary investments in education and energy. we have a difference when it comes to definitions of small business. under my plan, 97% of small businesses will not see their income taxes go up. governor romney says those top 3% would be burdened. under governor romney's definition, there are millionaires and businesses who are small businesses. donald trump is a small business. he does not like to think of himself as small anything. that is how you define small- business. that kind of approach will not grow our economy because the only way to pay for it without burdening the middle class or blowing up our deficit is to make drastic cuts in things like education, making sure that we are investing in basic science and research.

everything that is helping america grow. that would be a mistake. >> just for the record -- we are over our first 15 minutes. we are still on the economy. we will come back to taxes. we will move on to the deficit. >> mr. president, you are right. 97% of the businesses are not taxed at the 35% business rate. those businesses in the last 3% employ half of the people who work in small business. they have employed one quarter of all the workers of america. you plan to take their rate from 35% to 40%. i talked to a guy with four

employees. he said he and his son calculated how much they pay in taxes. it added up to well over 50% of what they earned. your plan is to take the tax rate of successful small businesses from 35% to 40%. the national federation of independent businesses says that will cost 700,000 jobs. i do not want to cost jobs. my priority is jobs. i bring down the tax rates, lower deductions and exemptions, the same ideas of bowles-simpson to create more jobs. there is nothing better toward getting us to the balanced budget than having more people working, paying more taxes. that is the most efficient way to get this budget balanced.

>> you may want to move on to another topic. if you believe we can cut taxes by $5 trillion, and add $2 trillion in additional spending, that the military is not asking for, $7 trillion -- over 10 years -- that is more than our entire defense budget. you think that by closing loopholes and deductions for the well-to-do, you will not end up picking up the tab. governor romney's plan may work for you. math, common sense, and our history shows us that is not a recipe for job growth. we have tried both approaches. the approach that governor romney is talking about is the same sales pitch that was made in 2001 and 2003. we ended up with the slowest job growth and 50 years.

we ended up living from surplus to deficits. it culminated in the worst financial crisis since the great depression. bill clinton tried the approach i am talking about. we created 23 million new jobs, but from deficit to surplus, and businesses did well. in some ways we have some data on which approach is more likely to create jobs and opportunity for americans. i believe that the economy works best when middle-class families are getting tax breaks and those of us who have done well because of this magnificent country we live in that we can afford to do more to make sure we are not blowing up the deficit. >> he gets the first word of that segment. let me make this comment. let me repeat what i said. i am not in favor of a $5

trillion tax cut. my plan is not to put in place any tax cut that will add to the deficit. that is not my plan. let's look at history. my plan is not like anything that has been tried before. my plan is to bring down rates and credit so the revenue stays in but we bring down rates to get more people working. my priority is putting people back to work in america. they are suffering. look at the evidence of the last four years. it is extraordinary. we have 23 million people out of work or have stopped looking for work. when the president took office, 47 million were on food stamps. economic growth is slower than last year and last year's lower than the year before. going forward with the status

quo will not cut it for the american people who are struggling. >> we are still on the economy. this is the second segment on the economy, specifically on what to do with the federal deficit. the federal debt. you each have two minutes. governor romney, you go first because the president went first on segment one. what are the differences between the two of you as to how you would go about tackling the deficit problem in this country? >> it is a critical issue. it is not as an economic issue. it is a moral issue. it is not moral from my generation to keep spending more than we take in knowing those burdens will be passed on to the next generation and they will pay the interest and principal for the rest of their lives. the amount of debt we are adding is not moral. how do we deal with it?

there are three ways that you can cut a deficit. one is to raise taxes. another is to cut spending. number three is to grow the economy. if more people work, they are paying taxes. the president would prefer raising taxes. the problem is that it slows down the rate of growth. you can never quite get the job done. i want to lower spending and encourage economic growth. i will eliminate all programs by this test if they do not pass it. is the program so critical is it is worth borrowing china to pay for it? obamacare is on my list. i use the term with all respect. i will get rid of that. i will stop the subsidy to pbs. i like pbs. i like big bird. i cannot keep spending money to borrow from china to pay for it.

i will take programs that are good programs but will be run more officially at the state level. -- more efficiently at the state level. i'll make government more efficient and cut back the number of employees and combine some agencies. my cutbacks will be done through attrition. the president said he would cut the deficit in half. he doubled it. trillion-dollar deficits for the last four years. the president has put in place almost as much debt held by the public as all prior presidents combined. >> when i walked into the oval office i had more than a trillion dollar deficit greeting me. we know where it came from. two wars paid for on a credit card, two cuts that are not pay for, programs that were not paid for, a massive economic crisis.

despite that, yes, we had to take some emergency measures to make sure we did not slip into a great depression. let's make sure we are cutting out things that are not helping us grow. 77 government programs from aircrafts that the air force ordered but were not working well. 18 government programs for education that were well- intentioned. they're not helping kids learn. we went after medical fraud in medicare and medicaid very aggressively. it saved tens of billions of dollars. $50 billion of waste out of the system. i worked with democrats and republicans to cut a trillion dollars out of our discretionary domestic budget, the largest cut in the discretionary domestic budget since dwight eisenhower.

we have to do more. i put forward a $4 trillion reduction plan on a website. you can look at the numbers. what cuts we make and what revenuwe raise. $2.50 for every cut we ask for a dollar of additional revenue, paid for by asking those of us who have done well in this country to contribute more to reduce the deficit. gov. romney earlier mentioned the bowles simpson commission. that is how they suggested we have to do it. in a balanced way with some revenue and some spending cuts. this is a major difference that we had. let me finish this point because you are looking for contrast. when gov. romney stood on stage with other republican candidates for the nomination, he was

asked, would you take $10 of spending cuts for $1 of revenue? he said, no. if you take such an unbalanced approach, that means you will be getting our investments in education.d i this means a 30% cut in the primary program we have four seniors in nursing homes, kids with disabilities. that is not a right strategy for us to move forward. >> way over the two minutes. what about simpson bowles. i have my own plan. in my view the president should have grabbed it. if he wanted to make some adjustments, take it, fight for it. >> we have made some adjustments and we are putting it before

congress right now. >> you have been president for four years. we still have $1 trillion the deficit. if you are elected we will get to a $1 trillion debt. i love this idea of $4 trillion in cuts. we still show a $1 trillion deficits every year. that does not get the job done. let me come back and say, why is it that i do not want to raise taxes? you said back in 2010, i will extend the tax policies that we have now. i will not raise taxes on anybody. when the economy is going slow, you should not raise taxes on anyone. the economy is still going slow. it is growing more slowly now than when you made the statement. if you believe the same thing, you just do not want to raise taxes on people. it is not just wealthy people.

you mentioned donald trump. it is all the businesses that employ one quarter of the businesses in america. you raise taxes and you kill jobs. that is what the national federation of independent business said your plan will kill 700,000 jobs. i do not want to kill jobs in this environment. >> let him answer the taxes thing for a moment. >> we had this discussion before. but in order to reduce the deficit, there has to be revenue in addition to cuts. >> gov. romney has ruled out revenue. >> absolutely. the revenue i get is by more people working and getting higher pay and pay more taxes. that is how we balance the budget. the idea of putting more people out of work, you will never get there. you never balance the budget by

raising taxes. spain spends 42% of their total economy on government. now spending 42% of our economy of government. i want to go down the plan of growth that puts a americans to work with more money coming in because they are working. >> in order to get the job done, it has to be balanced. >> we have to take a balanced, responsible approach. this is not just when it comes to individual taxes. let's talk about corporate taxes. i have identified areas where we can make a change that i believe would help the economy. the oil industry gets $4 billion a year in corporate welfare. they did deductions that small businesses that gov. romney refers to, they do not get. does anybody think exxon mobil needs some extra money when they are making money every time you

go to the pump? why would we not want to eliminate that? why would we not eliminate tax breaks for corporate jets? my attitude is that you can probably afford it and i did a special break. when it comes to corporate taxes, gov. romney in a revenue neutral way wants to close loopholes, deductions -- he has not identified which ones they are -- but there by bring down the corporate rate. i want to do the same thing, but i have identified how to do that. part of the way is to not give tax breaks to companies shipping jobs overseas. you can take a deduction for moving a plant overseas. i think most americans would say, that does not make sense. if we take a balanced approach, what that allows us to do is to help young people, the way we

have already have, make sure they can afford to go to college. it means the teacher i met in las vegas, a wonderful young lady, she describes how she has 42 kids in her class. some of them are sitting on the floor until finally they get reassigned. they are using textbooks 10 years old. that is not a recipe for growth. that is not how america was built. budgets of fact choices. ultimately we will have to make decisions. if we are asking for no revenue, that means we have to get rid of a whole lot of stuff. the magnitude of the tax cuts you are talking about would end up resulting in severe hardship for people, but more importantly, it would not help us grow. when you talked about shifting medicaid to states, we are talking about potentially a 30% cut in medicaid over time.

that may not seem like a big deal when it just is numbers on a sheet of paper, but if we are talking about a family that has a kid and is depending on the medicaid, that is a big problem. they are not created enough to make up 30% of revenue on something like medicaid. ends up happening is some people and not getting help. >> we have gone on to a lot of topics there. it will take a minute to go from medicaid to the schools. let's go through them one by one. the department of energy has said tax breaks for the oil companies is $2.8 billion a year. it is something that has been in place for 100 years. >> it is time to end it. >> in one year you provided $90 billion in breaks to the great energy world. i like green energy as well, but that is about 50 years' worth of what will and gas receives.

you say exxon and mobil -- $2.8 billion goes largely to small companies and drilling operators. if we get the tax rate from 45% to 28%, that $2.8 billion is on the table. that will probably not survive. do not forget, you put $90 billion, 50 years worth of breaks into solar and wind, two cylinder of -- to solyndra. i had a friend that said you do not pick the winners and losers, you pick the losers. i have been in business for 25 years. i have no idea what you are talking about. maybe i need to get a new accountant. i did you get a break for shipping jobs overseas is simply not the case. but we have is something to

bring revenue back to this country. i would like to take the medicated dollars that go to states and say to a stay, you will get what you got last year plus inflation plus 1% and then you will manager care for your poor in the way you think best. i remember as a governor when this idea was floated, the governors, republican and democrat, said, please, let us do that. we can care for our poor in a more effective way than having the federal government tell us how to care for the poor. one of the magnificent things about this country is the whole idea that states are the laboratories of democracy is. don't have the federal government tell everybody what kind of training programs they have to have and what kind of medicaid they have to have. let's do this. if a state gets into trouble, we can step in and see if we have a way to help them. the right approach is one that relies on the brilliance of our

people and states, not the federal government. >> still on the economy but another part of it. this is segment 3, the economy. first answer does to you, two minutes, mr. president. do you see a difference between the two of the on social security? but i suspect that on social security we have somewhat similar position. social security is structurally sound. it will have to be tweaked the way it was by ronald reagan and tip o'neill. the basic structure is sound. i want to talk about the values behind social security and medicare, and then talk about medicare. that is the big driver of our deficit right now. my grandmother, some of you know, helped to raise me. my grandfather died a while back. my grandmother died three days before i was elected president.

she worked her way up and started as a secretary, ended up being the vice president of a local bank. she ended up living alone by choice. the reason she could be independent of was because of social security and medicare. she had worked all of her life, put in this money, and understood there was a basic guarantee under which she could not go. that is the perspective i bring when it is called entitlements. the name itself implies dependency. these are people who have worked hard, like my grandmother. there are millions of people counting on this. my approach is, how do we strengthen the system in the long term? what we did in medicare is say, we are going to have to bring down the costs if we deal with long-term deficits. to do that, let's look at where some of the money is going.

$716 billion we were able to say from the medicare program by no longer over paying insurance companies by making sure we were not over paying providers. we were able to lower prescription drug costs for seniors by an average of $600 and we were able to make a significant debt and providing them the preventative care that will ultimately save money throughout the system. the way for us to do this is to lower health-care costs. when it comes to social security, as i said, you do not need a major structural change in order to make sure social security is there for the future. >> our seniors depend on these programs. i know any time we talk about entitlements, people become concerned something is going to happen that would change their life for the worse. neither the president nor i are

proposing any changes for any current retirees or near retirees into social security or medicare. if you are 60, you do not need to listen any further. for younger people, we need to talk about what changes will be occurring. i just thought of one. i was wrong when the president said he is not proposing any changes on medicare. for current retirees, he is cutting $716 billion from the program. he says by not over paying hospitals and providers. just going to them and say we will reduce the rates to get paid across the board, everybody will get a lower rate. that is saying we are cutting the rates. 15% of hospitals and nursing homes say they will not take more medicare patience. we have a 50% of doctor saying they will not take more medicare patience. we have 4 million people on

medicare advantage that will lose it because of the $716 billion in cuts. i cannot understand how you can cut medicare $716 billion for current recipients. you point out, we are putting some back. that is $1 for every 15 you have cut. they are smart enough to know that is not a good trade. i want to take the $715 billion you have cut and put it back into medicare. we can use a prescription program if we need to improve it. the idea of cutting medicare to balance the cost of obamacare is a mistake. with regards to young people coming along, i have proposals to make sure medicare and social security are there for them without question. >> first of all, i think is all important for gov. romney to present this plan that he says will only affect people in the future. the essence of the plan is that

you would turn medicare into a voucher program. it is called premium support. it is understood to be a voucher program. >> you do not support that? >> i do not, and let me explain why. if you are 54 or 55, you might want to listen. this will affect you. the idea, that was originally presented by congressman rya your running mate, is that we would give a voucher to seniors. they can go out to the private marketplace and buy their own health insurance. the problem is that because the voucher would not necessarily keep up with health care inflation, it was estimated this would cost the actual senior about $60,000 a year. what gov. romney has not said is he will maintain traditional medicare alongside it. there is still a problem.

those insurance companies are pretty clever at figuring out who are the younger and healthier seniors. they recruit them, leaving the older senior citizens in the medicare. over time what will happen is the traditional medicare system will collapse. then what you have is people like my grandmother at the mercy of the private health system at the time they are most in need of decent health care. i do not think doctors are the right way to go. this is not my -- only my opinion, aarp thinks the savings to bolster the system, lang defended the trust fund by 80 years. benefits were not affected at all. if he repeal obamacare -- and i have become fond of this term. if you repeal it, those seniors will be paying $600 more in

prescription care. they will have to pay copays for basic checkups that will keep them healthier. the primary beneficiary of that repeal our insurance companies that are estimated to gain billions of dollars back when they are not making seniors any healthier. i do not think that is the right approach when it comes to making sure medicare is stronger over the long term. what's do you support the voucher system, governor? >> what i support is no change to current retirees and near retirees to medicare. the president supports taking $716 billion out of the program. that is number one. no. two is for people coming along that is young. what i do to make sure we keep medicare in place for them is to allow them to choose the current medicare program or a private

plan. they will have at least two plans that will be entirely at no cost to them. no additional $6,000, that will not happen. if the government can be as efficient as the private sector and offer premiums as low as the private sector, people will be happy to get traditional medicare. i know my own view is, i would rather have a private plan. i rather assume not the -- i would rather assume not having the government, what plan to have it. people make their own choice. we have to have the benefits high for those low income, but for higher income people, we will have to lower some of the benefits. we have to make sure the program is there for the long run. the idea came not only from paul ryan but also it came from bill clinton's chief of staff. this is an idea that has been

around a long time. let's see if we can get competition into the medicare world so people can get the choice of different plans, better quality. i believe in a competition. >> first of all, every study has shown medicare has lowered administrative costs, which is why seniors are generally pretty happy with it. private insurers have to make a profit. there is nothing wrong with that, that is what they do. you have higher administrative costs, plus profit on top of that, and if you are going to save any money through what gov. romney is proposing, what has to happen is that the money has to come from somewhere. when you move to a voucher system, you are putting seniors at the mercy of those programs. over time if traditional medicare has decayed or fallen apart, then they are stopped.

this is the reason why aarp has said your plan would weaken medicare substantially. that is why they were supportive of the approach that we took. we do have to lower the cost of health care, not just in medicare, but over all. >> that is a big topic. >> i want to get to it. to medicare.back the president said they can provide at lower cost them without a profit. if that is the case, it will always be the best product people can purchase. my experience is that the private sector is typically able to provide a better topic -- a better product at a lower price. >> to finish quickly, briefly on the economy, what is your view about the level of federal

regulation right now? is there too much? in your case, should there be more? we will go for a few minutes and then go to health care. >> regulation is essential. you cannot have a free market if you do not have regulation. i needed to know the regulations as a business person. you could not have people opening up banks in their grudge. you have to have regulations so an economy can work. at the same time, regulation can become excessive. >> is in excess of now? >> it can. it can become out of date. some of the legislation passed during the president's term, you have seen regulation become excessive. it has hurt the economy. dodd-frank was passed. it includes within it a number of provisions i think has some

provisions harmful to the economy. this is the biggest case given to new york banks i have ever seen. there have been 122 community and small banks that have closed since dodd-frank. in dodd-frank -- >> would be repealed dodd-frank? >> i would replace it. there are some parts that make all the sense in the world. you need transparency, you need leverage limits. let me mention the other one -- >> let's not. let's let him respond to this specific on dodd-frank. >> i think this is a great example. the reason we have been in such an enormous economic crisis was prompted by a reckless behavior

across the board. it was not just on wall street. you had a loan officers that were given loans and mortgages that really should not have been given because people did not qualify. people were barley money for house is they cannot afford. -- people were borrowing money for houses they could not afford it. you had banks making money hand over fist turning out products that the bankers themselves did not understand in order to make big profits but knowing it made the entire system of marble. what did we do? we stepped in and had the toughest reforms on wall street since the 1930's. you have banks. you have to raise your capital requirements. you cannot engage in behavior that puts main street at risk. you have to have a living will

so we know how you well wind things down if you make a bad bet. we made sure all the help we provided those banks were paid back with interest. gov. romney says he wants to repeal dodd-frank. it appears we have some agreement that a market place to work has to have some regulation. in the past he has said he wants to just roll it back. the question is, does anybody out there think that the big problem we had was that there was too much oversight and regulation of wall street? if you do, then gov. romney is your candid it. that is not what i believe. >> that is just not the facts. we have to have regulation of wall street. i would not designate five banks as too big to fail and give them a blank check.

that is one of the unintended consequences of dodd-frank. we need to get rid of that because it is killing regional and small banks. you say we were giving mortgages to people not qualified. that is exactly right. that is one of the reasons for the financial calamity that we had. dodd-frank says we need to have qualified mortgages. there are big penalties for giving mortgages that are not qualified. excepted never says what a qualified mortgage is. it has been two years. banks are reluctant to make mortgages. try to get a mortgage these days. it has hurt the housing market because dodd-frank did not anticipate putting in the kinds of regulations that you have. sometimes they did not come out with a clear regulation. i will make sure we do not hurt to the functioning of our marketplace and businesses.

i want to bring back housing and get new jobs. >> i think we have another clear difference between the two of you. let's move to health care, where i know there is a clear difference. that has to do with the affordable care act -- obamacare. it is a new segment. you go first, and gov. romney. you want repealed. why? >> it comes from my experience. i was in new hampshire. a woman said, i cannot afford insurance for myself or my son. i met a couple in wisconsin who said, we are thinking of dropping our insurance because we cannot afford it. the number of small businesses that cannot afford it -- the cost of health care is just prohibitive it. unfortunately, when you look at obamacare, the congressional budget office has said it would

cost $2,500 a year more than traditional insurance. it is adding to cost. when the president ran for office he said by this year he would have brought down the cost of insurance by $2,500 a family. instead it has gone up by that amount. expensive things hurt families. second reason, it cut $716 billion from medicare to pay for it. number three, it puts in place and an elected board that will tell people what kind of treatments they can have. i do not like that idea. fourth, there was a survey done of small businesses across the country that said, what has been the effect of obamacare on your hiring plans? three-quarters said it makes us less likely to hire people. i do not know how the president could have come into office facing 23 million people out of work, an economic crisis at the

kitchen table and spent his energy and passion 40 dead years fighting for obamacare instead of jobs. -- for two years fighting for obamacare instead of jobs. the best is to fight at the state level that fits the needs at the state and then focus on getting the cost down, rather than raising it with a $2,005 premium. >> mr. president, the argument against repeal. >> four years ago i was traveling around and having the same conversations gov. romney talks about. it was not just that small businesses were seeing costs skyrocket and they cannot get affordable coverage even if they wanted to provide it, it was not just that this was the biggest driver of the federal deficit, it was families who were more worried about going bankrupt if they got sick. millions of families across the country, if they had a pre-

existing condition, they might not get coverage at all. if they did have coverage, insurance companies might iose an arbitrary limit. as a consequence, they are paying their premiums and if somebody gets really sick, lo and behold they do not have enough money to pay the bills because the insurance companies say they have hit the limit. we did work on this a long side working on jobs. this is part of making sure middle-class families are secure in this country. let me tell you exactly what obamacare did. if you have health insurance, it does not mean a government takeover. you keep your own insurance. it does say they cannot turkey around. they cannot impose arbitrary lifetime limits. they have to let you keep your kid on your insurance plan. it also says you are going to have to give rebates if

insurance companies are spending more on administrative costs and profits than actual care. no. 2, we are essentially setting up a group plan that allows you to benefit from group rates that are 18% or lower than if you are out there trying to get insurance on the individual market. the last. i will make -- >> >> your minute is up. >> i think i have five seconds before you interrupted me. [laughter] the irony is we have seen this model work well in massachusetts. gov. romney did a good thing to working with democrats in the state to set up what is essentially the identical model. as a consequence people are covered there. it has not destroyed jobs. as a consequence we have a system where we have the

opportunity to start bringing down costs instead of leaving millions of people out in the cold. >> year five seconds when a long way. until the president what you think what he just said is wrong. >> first of all, i like the way we did it in massachusetts. i like the way we had republicans and democrats come together and work together. what you did was push through a plan without a single republican vote. when massachusetts did something quite extraordinarily, elected a republican senator to stop obamacare, you pushed it through anyway. he pushed through something that you and nancy pelosi and harry reid thought was the best answer and drove it through. what we did, 87% democrat, we worked together. 200 legislators, only two voted

against it. we did not raise taxes. he raised the by $1 trillion. we did not cut medicare. we did not have medicare, but we did not cut it by $700 billion. we did not put together a board telling people what treatments they can receive. we put people in a position -- we did not put people in a position where they would lose the insurance they have an wanted. the cbo says up to 20 million people will leave -- lose their insurance. a study said 30% of them are anticipating dropping people from coverage. for those reasons, for the tax, medicare, this board, and for people losing insurance, this is why the american people do not want obamacare. is why the republicans said do not do this. the republicans put out a

bipartisan plan that was swept aside. i think something this big and important has to be done on a bipartisan basis. we have to have a president i can reach across the aisle with input from both parties. >> gov. romney says this has to be done on a bipartisan basis. this was a republican idea. gov. romney at the beginning of the debate said, what we did in massachusetts could be a model for the nation. i agree the democratic legislators and massachusetts might have given advice to republicans in congress on how to cooperate. we use the same advisers, and they say it is the same plan. when the gov. romney talked about this a board for example, this unelected board that was created, this is a group of health care experts, doctors, to figure out how we can reduce the cost of care in the system

over all. there are two ways of dealing with the health care crisis. one is to simply leave a whole lot of people uninsured and let them fend for themselves. let businesses figure out how long the bacon accept premiums until they just give up. we can figure out how we can make the cost of care more effective. there are ways of doing it. at a cleveland clinic, one of the best health care systems in the world, they actually provide great care cheaper than average. the reason they do is because they do some smart things. they say if a patient is coming in, let's get all the doctors together at once into one test instead of having the patient run around with 10 tests. let's make sure we are providing preventive care so we are catching the onset of something like diabetes.

let's pay providers on the basis of performance as opposed to on the basis of how many procedures they engage in. what this board does is basically identify best practices. let's use the purchasing power of medicare and medicaid to help institutionalize all of the good things that we do. the fact of the matter is that when obamacare is fully implemented, we are going to be in a position to show that costs are going down. over the last two years, health care premiums have gone up -- it is true -- but they have gone up slower than any time in the last 50 years. we are already seeing progress. people out there with insurance are already getting a rebate. governor mitt romney says we should replace it. we can replace it with

something. he has not describe what exactly we would replace it with other than saying we will leave it to the states. the fact of the matter is, some of the prescriptions he has offered like letting me by insurance across state lines, there is no indication that will help somebody who has a pre-existing condition to be able to finally buy insurance. it is estimated that by repealing obamacare you are looking at 50 million people losing health insurance at a time it is vitally important. >> let's let the governor explain what you would do if obamacare is repealed. >> pre-existing conditions are covered under my plan. young people are able to stay on their family plan. that is already offered in the private marketplace. you do not need the government -- government to mandate that.

the key task we have in health care is to get the cost down so it is more affordable for families. he has a model for doing that, an unelected board who will decide what kind of treatment you ought to have a. in my opinion, the government is not effective in bringing down the cost of almost anything. as a matter of fact, free people and free enterprise is try to find a way to do things together are more effective at bringing down the cost that the government ever will be. your example of the cleveland clinic is exactly my point. this is the private market. these are enterprises competing with each other and learning how to do better jobs. i used to consult to hospitals and health-care providers. i was astonished at the creativity and innovation that exists in the american people. in order to bring the cost of health care down, we do not need a board of the 15 people telling us what kind of treatments we should have.

we should have insurance plans, hospitals, doctors on targets so that they have an incentive, performance pay for doing an excellent job for keeping costs down. that is happening. mayo clinic is doing it. the cleveland clinic and others. the right answer is not to have the federal government take over health care and start mandating to the providers across america telling a patient and a doctor what kind of treatment they can have. that is the wrong way to go. the private market and individual responsibility always works best. >> let me point out first of all this board we are talking about cannot make decisions about what treatments are given here that is explicitly prohibited in the lot. let's go back to what gov. romney indicated. under his plan, he would be able to cover people with pre- existing conditions.

actually governor, that is not what your plan does. your plan duplicates what is already the law. if you are on health insurance for three months, then you can end up getting continuous coverage. insurance company cannot deny you if it has been under 90 days. that is already the law. that does not help millions of people out there with pre- existing conditions. there is a reason why governor mitt romney said of the plan he did in the massachusetts. it was the largest expansion of private insurance. what it does say is insurers -- you have to take everybody. that also means -- when gov. romney says he will replace it with something but cannot detail how it will be replaced -- and the reason he said of the

system he did in massachusetts is because there is not a better way of dealing with pre-existing conditions. it just reminds me -- he says he will close deductions and loopholes for his tax plan. we do not know the details. he says that he is going to replace dodd-frank, wall street reform, but we do not know exactly which ones. he will not tell us. he now says he will replace obamacare and insurer as all the good things and it will be in there and you do not have to worry. at some point the american people have to ask themselves, is the reason gov. romney is keeping all of these plans to replace secret because they are too good? is it because somehow middle- class families will benefit too much from them? the reason is because when we reform wall street, when we tackle the problem of pre-

existing conditions, these are tough problems and we have to make choices. the choices we have made have been ones that ultimately benefited middle class families. >> i have to respond to that. my experience as a governor is that if i come in and lay down a piece of legislation and say it is my way or the highway, i do not get a lot done. what i do is the same way that tip o'neill and ronald reagan work together years ago. he laid out the principles that he was going to foster. he said he would lower tax rates. he said he was going to broaden the base. you said the same thing. those are my principles. i want to bring down the tax burden on middle income families. i will work together with congress to say what are the various ways we can bring down deductions. one way will be to have a single number.

make up a number -- $50,000. anybody can have deductions up to that amount. that number disappears for high income people. one could follow bowles simspn as a model. there are other ways to accomplish the objective that i have it. simplify the code, broaden the base, and create incentives for growth. with regards to health care, you obviously studied up on my plan. in fact, i do have a plan that deals with people with pre- existing conditions. what we did in massachusetts is a model for the nation state by state. i have said that at that time. the federal government taking over health care for the entire nation and it was king aside the 10th amendment that gives states the rights for these kind of things is not the course for america to have a stronger, more vibrant economy. >> that is a terrific segue to our next segment -- the role of government. the role of government. give us your approach on this, mr. president.

do you believe that the -- is there a fundamental difference between the two of you on how you viewed the mission of the federal government? >> i definitely think there are differences. the first role is to keep the american people safe. that is the most basic function. as commander in chief, that is something that i have worked on and thought about every single day i have been in the oval office. but i also believe that government has the capacity -- the federal government has the capacity to help open up opportunity entry ladders of opportunity and to create frameworks' where the american people can succeed. the genius of america is the free enterprise and freedom and the fact that people can go out there and start a business, work on an idea, make their own

decisions. as abraham lincoln understood, there are also some things we do better together. in the middle of the civil war, abraham lincoln said, let's help to finance the transcontinental railroad. let's start the national academy of sciences. let's start land grant colleges. we want to give these gateways of opportunities to all americans. if all americans are getting an opportunity, we will all be better off. that does not restrict freedom, that enhances it. what i have tried to do as president is to apply the same principles. when it comes to education, what i have said is we have to reform schools that are not working. we do something called race to the top. we have said states -- we will give you more money if you

initiate reforms. we have had 46 states who have made a real difference. what i have also said is, let's hire another 100,000 math and science teachers to make sure we maintain a technological lead and people are skilled and able to succeed. hard-pressed states right now cannot do that. we have seen layoffs of hundreds of thousands of teachers over the last several years. gov. romney does not think we need more teachers, i do. i think that is the kind of investment or the federal government can help. it can make a difference. as a consequence we will have a better trained work force, and that will create jobs because companies want to locate in places where there is a skilled workforce. >> i love great schools. massachusetts, our schools are ranked no. one of 50 states. the key to grade schools, is great teachers. i reject the idea i do not believe in great teachers.

every state should make that decision on their own. the role of government -- look behind us. the constitution and the declaration of independence. is to promote and protect the principles of those documents first. life and liberty -- we have a responsibility to protect the lives of people. i do not believe in cutting the military. i want to maintain the strength of the military. the line that says we are endowed by our creator with our rights -- we must maintain our commitment to religious tolerance and freedom in this country. it also says we are endowed by our creator with the right to pursue happiness as we choose. i interpret that as making sure those people who are less fortunate and cannot care for a themselves are cared for by one another. we are a nation that believes we are all children of the same god and we care for those who have difficulties.

those who are elderly, those who are disabled, we care for them. we look for discovery and innovation and all these things to pursue the pursuit of happiness for our citizens. we believe in maintaining for individuals the right to pursue their dreams. not to have the government substitute itself for the rights of free individuals. what we are seeing right now is in my view a trickle-down government approach which has government thinking they can do a better job every people pursuing their dreams. is not working. the proof of that is not everyone is and work here we have gone to 47 million people in food stamps. 50% of college graduates this year cannot find work. we know the path regarding is not working. -- we are taking is not working. it is time for a new path.

>> education. does the federal government have a responsibility for education? >> the primary responsibility is at the state and local level. i agree with arne duncan. some ideas he has put forward on race to the top. some of them i agree with and congratulate him on pursuing that. the federal government can get state and local schools. i wanted the kids who are getting federal dollars from title 1 -- disabled kids or lower income kids, i went and to be able to go to the kids at -- to the school of their choice. i would have them follow the child and let the parent and child decide where to send their student. >> how do you see the federal government's responsibility to improve the quality of education?

>> it has a significant role to play. we have worked with republican and democratic governors to initiate major reforms. they are having an impact right now. this is where budgets matter. budgets reflect choices. when gov. romney indicates that he wants to cut taxes and potentially benefit people like me and him, to pay for it we have to initiate significant cuts in federal support for education, that makes a difference. his running mate congressman ryan put forward a budget that reflects many of the principles gov. romney has talked about. it was not very detailed. this seems to be a trend. what it did do -- if you extrapolate it how much money we are talking about, you are

looking at cutting education by 20%. when it comes to community colleges, we are seeing great work done out there all over the country because we have the opportunity to train people for jobs that exist right now. one thing i suspect we probably agree on is getting businesses to work with community colleges. >> do you agree? >> let me finish my point. they are partnering -- they are designing training programs and people who are going through them know there is a job waiting for them if they complete it. there requires some federal support. let me say one final example. when it comes to making college affordable, whether it is two- year or four-year, one thing i did is we were spending $60 million to banks and lenders as

middlemen for the student loan program, even though they were guaranteed. there was no risk for the banks and lenders, but they were taking billions out of the system. why not cut out the middleman? we have been able to provide millions of more students assistance, lower or keep a low interest rates on student loans, this is an example of where our priorities make a difference. i genuinely believe gov. romney cares about education. when he tells a student that you should borrow money from your parents to go to college, that indicates the degree to which there may not be as much of a focus on the fact that folks like myself, folks like michele, kids who probably attended the university of denver did not have that option. for us to make sure they have the opportunity and can walk through the door, that is vitally important not just to the kids, it is how we will grow the economy over the long term. >> we are running out of time. response to that. >>-- respnd to that. >> i have no plan to cut

education funding and grants for people going to college. i am not planning on making changes there. you make a good point. the place you put your money makes it a clear indication on where your heart is. you put $90 million into green jobs. i am all in favor of green energy. that would have hired 2 million teachers. $90 billion. these businesses may have gone out of business -- a number of them happen to be owned by people who are contributors to your campaigns. the right course for a merit oppose the government -- america's government is not to

pick winners and losers, not taking over the health care system that has existed in this country for a long time and has produced the best health records in the world, the right answer is to say how do we make the private sector more efficient? how do we make schools more competitive? i suggest we grade our schools so parents can take their kid to a school that is more successful. i did not want to cut our commitment to education, i want to make it more efficient. i have had that experience. i do not just talking about it, i have been there. massachusetts schools are ranked no. 1 in the nation. this is because i care about education for all of our kids. >> we barely have in three minutes left.

i will not raid the two of you and say your answers have been too long. >> you have done a great job. >> the role of government and governing, we only have three minutes left before we go to the closing statements. i want to ask finally -- remember we have three minutes total time. many of the legislative functions of the federal government are in a state of paralysis as a result of partisan gridlock. if elected -- if reelected in your case, what will you do about that? >> i had a great experience of being elected in a state where my legislator -- legislature was 87% democrat. that means we had to work together to get things done. we cut taxes --

>> what will you do as president? >> i will sit down on day one -- actually the day i get elected -- i will continue as we did in my state. we met every monday and talked about the challenges in our state in that case. we have to work on a collaborative basis, not because we will compromise our principles, but because there is common ground. the reason i am in this race is because there are people hurting. we face this deficit that could crush future generations. there are developments a round the world that are of real concern. republicans and democrats both loved america, but we need to have leadership in washington that will bring people together and get the job done and could not care less if it is a republican or democrat.

i have done it before, and i will do it again. >> i think gov. romney will have a busy first day because he is going to repeal obamacare which will not be popular among democrats if you are sitting down with them. my philosophy has been, i will take ideas from anybody as long as they are advancing the cause of making middle-class families stronger and giving ladders of opportunity. that is how we cut off -- that is how we cut taxes for the middle-class. that is how we cut spending that was not advancing the cause. that is how we signed a free- trade agreements into law. that is how we repealed don't ask don't tell.l that is how we ended the war in iraq, and that is how we will wind down the war in afghanistan. we have seen progress even under republican control of the house of representatives. part of being principled and part of being a leader is being

able to describe exactly what it is you intend to do, not just saying "i'll sit down." occasionally you have to say no to people both in your own party and in the other party. yes, have we had some fights between me and the republicans when they fought against us reining in the excess against wall street? absolutely. that was a fight that needed to be had. about whether americans had more security with their health insurance, that was a fight we needed to have. part of leadership and governing is both saying what it is you are for and also being able to say no to some things. when it comes to his own party in the course of this campaign, he has not displayed the willingness to say no to some of the more extreme parts of his party. >> that brings us to closing statements.

gov. romney, you elected to go last. you have two minutes, mr. president. >> i want to thank you, and i want to thank gov. romney because this was a terrific debate. i want to thank the university of denver. four years ago we were going through a major crisis. yet, my faith in the american future is undiminished. the reason is because of its people. because of a woman i met in north carolina who decided at 55 to go back to school because she wanted to inspire her daughter and now she has a new job. because of a company in minnesota willing to give up salaries and perks for the executives to make sure they did not lay off workers during a recession. the auto workers that you need in toledo or detroit take such pride in building the best cars

in the world not just because of a paycheck, but because it gives them a sense of pride that they are helping to build america. the question now is how do we build on the strengths? everything i have tried to do everything i am proposing for the next four years as far as improving education or developing american energy or making sure we are closing loopholes for companies shipping jobs overseas and focusing on small businesses create jobs in the united states, or closing deficit in a responsible way for a lot of us to invest in the future, all of those things are designed to make sure that the american people, their genius, their determination is channeled and they have an opportunity to succeed. everybody is getting a fair shot. everybody is playing by the same rules. four years ago i said i am not a perfect man and i will not be a perfect president.